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Human Judgment Beats Simulation

Human Judgment, also known as Seat Of The Pants Analysis (SOTPA), is probably the least acknowledged but most widely used alternative to simulation. SOTPA is making decisions by instinct and feelings rather than using objective analytical tools. With SOTPA you never actually have to get out of your chair, or even spend any significant time to reach a decision.

I use SOTPA all the time and you probably do too.

When I am in a hurry to go out and want to know if I should wear a jacket or bring an umbrella, I might take a quick look out the window, reflect on the season and yesterday’s weather, then make a decision. That’s SOTPA. I know that there is a high likelihood that I will be wrong, but I don’t want to take the time to do the weather channel research to get more objective information.

Human judgment beat simulation in this case. But not always.

When I am going on an all-day outside outing and have the same decision to make; the importance of being correct increases. In that situation I will take the time to consult at least two weather sources and even step outside for some direct research. With this objective analysis I can make a more informed decision. Although such an analysis is never perfect, including objective data in my analysis dramatically increases the likelihood that my decision will be correct.

Now let’s say I am a manager and my staff comes to me proposing purchase of a new piece of equipment to solve an important problem in my facility. They may give me technical specifications, maybe some manual or spreadsheet calculations, perhaps even show me a case study about how that equipment was used in another facility. The easy thing for me to do at that point is to make a SOTPA-based decision. After all, I must be pretty smart to get to be a manager, right? Right?? 🙂 And I know THE BIG PICTURE. So who better than me to make the decision? And why should I need more information?

If you haven’t read it, I’d suggest you pause now and read the blog on Predicting Process Variability. Did you pass the test? Don’t feel bad, almost no one does. My facility is much more complicated than that one. If I cannot predict the performance of such a simple system, why should I expect that I can predict the impact of adding this proposed equipment to my facility?

“But I don’t have time to simulate.” I don’t have time to research weather when the penalty of being wrong is low, but I make the time to do it when the penalties are higher. With modern simulation tools you can often get valuable results in a short period of time. In two or three days you can often provide an objective analysis that can save a few hundred thousand dollars. Let’s see, invest $3000, save $200,000 … I think I can make the time for that. How about you?

Simulation beats human judgment when it matters.

When someone else uses SOTPA you might say they bent over and pulled the answer out of their… um, … er, shoe. “What was he thinking?” Don’t let that be you.

Reserve SOTPA for decisions that don’t matter. Use simulation for the decisions that do.